1. Overview of Single Audits

Audits of recipients of federal financial assistance should be conducted in accordance with both GAAS and GAGAS. The following requirements also apply:

• Expanded internal control documentation and testing requirements.

• Expanded reporting to include formal written reports on the consideration of internal control and the assessment of control risk.

• Expanded reporting to include whether the federal financial assistance has been administered in accordance with applicable laws and regulations (i.e., compliance requirements).

• Application of single audit standards to federal financial assistance.

2. Auditee Responsibilities

Auditors must be selected using procurement standards established by federal guidelines. Procurement standards preclude limitations on competition, including:

• The use of a single or sole source vendor (only considering one firm).

• Providing preferences to local firms (giving advantages to firms based on geographic location).

Proposals made by auditors must be evaluated for:

• Responsiveness to the request for proposal.

• Relevant experience.

• The availabi lity of professionally qual ified staff.

• The results of peer reviews.

• Auditees must request a copy of the audit organization's peer review report. In selecting an auditor, the use of small and minority-owned businesses is encouraged.

• Consultants engaged to develop indirect cost plans may not be engaged as the auditor when the indirect costs recovered by the auditee during the prior year exceed $1 million.

3. Auditor Responsibilities

The auditor should express an opinion regarding the fair presentation of the financial statements and related schedules. In addition, the auditor should consider internal control, compliance, and previous audit findings.